‘Revenue drop is due to economic slowdown, less imports’

KARACHI: Chairman of the FPCCI Advisory Board and National Business Group Pakistan and the President of Pakistan Businessmen and Intellectuals Forum (PBIF) Mian Zahid Hussain said that revenue has decreased substantially due to the slowdown in the economy and decrease in imports.

He said the government would have to bring a mini-budget to bridge the shortfall. He said that the mini-budget will further affect the economy and increase people’s suffering.

He said that instead of introducing a mini-budget, the situation can be improved if electricity prices are reduced by 9 cents for industries and the markup is slashed by four percent. He said that the decision to increase taxes was made due to the IMF’s pressure when the country’s economic condition was relatively weak, further worsening the situation.

Also, imports have been reduced due to economic slowdown, a significant income source. The recent three-and-a-half percent reduction in interest rates has given modest relief to the business community. Still, he observed that a further decrease of four percent is necessary.

He said that by bringing electricity prices to 9 cents, Pakistan’s exports are expected to increase by six billion dollars immediately, increasing Pakistan’s foreign exchange reserves, improving Pakistan’s debt repayment capacity, and boosting its credit rating.

Mian Zahid Hussain said that increasing exports by US six billion dollars will improve the country’s employment situation and relieve the people.

He said that past experiences showed that instead of bringing new taxpayers into the system, the tax burden will be increased on the existing taxpayers.

A proposal to increase the withholding tax by one percent from October 1 is under consideration, which is unlikely to benefit any stakeholder. He said that due to the existing policy of increasing the burden on taxpayers, the size of the documented economy is decreasing while the size of the undocumented economy is continuously growing.

If this situation continues, the documented economy will shrink further. A large part of the economy is undocumented, and traders and landlords are unwilling to pay taxes, leaving taxpayers at the mercy of tax collectors.

Copyright Business Recorder, 2024